[Calc Review] Help me analyze this deal
Member since 2021 · 42 posts · 7 votes
[Calc Review] Help me analyze this deal
Most Popular Reply
Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
10mo@Marcos Cardenas Several thoughts come to mind.
Sale price is 240k but the mortgage amount is 230k. To clarify, not putting 20% down causes one to pay PMI. I didn't see that in your expense category. Yes I also understand it is a house hack, but both sides are occupied. I thought the leases ran through June 2026. You may have to move in a bit earlier to comply with owner occupied loan provisions.
Overall, this is an EXCELLENT opportunity if you are going from renting to owning and house hacking. It is a GOOD opportunity if you were not house hacking. The 1% rule is what I use for the initial evaluation on the property. However, you have to include purchase price plus rehab cost and evaluate that against your rental income. Meaning that 240k plus 25k rehab (more like 30-35k) makes your purchase price 265k. To meet 1% you need $2,650 monthly rent, you are receiving $2800. I think this will work for you. I wouldn't call it a home run but a solid single to double.
Someone said be mindful of LOCATION, LOCATION, LOCATION. I don't give a sheet about location or school districts when renting a duplex. That is because my tenants could care less about location and/or school districts. Tenants that rent a duplex are looking for something clean, safe/comfortable and CHEAP! Cheap being the most important ingredient.
Don't misunderstand what I am saying, don't buy in a war zone but duplex communities are normally blue collar, lots of cars, and a rental neighborhood as compared to SHF housing, a mix of white/blue collar, fewer cars, and owner occupied properties who take pride in housing appearance and lawn care.
What YOU are interested in is NUMBERS that make the property profitable. Most of my duplexes are 2 bedrooms. Therefore I usually don't have families with children. If I do they are very young and don't attend school. I usually have a couple living together or a single tenant. So they are not concerned with schools and they usually are living paycheck to paycheck so affordability is highest priority. So if you can make your duplex the best on the block and keep rents very reasonable your occupancy will be good. I usually show my property one time before I get a signed contract. That is because of two things: I verbally screen prospects before I take the time to show my property and 2. My properties appearance is top notch when compared to the competition. Nice appliances, ceiling fans in living room and each bedroom, granite counter tops in kitchen and bathrooms, and tile or luxury vinyl flooring with new tall baseboards. Wall are painted with contrast not the same as the baseboards or ceiling. Microwave over stove. You want to show the property by opening the door and let them walk in first. If you hear them say "WOW" with in the first 5 steps in the property you know you have them as a tenant should YOU want them.
If you want more tips, do one of two things. Go to my profile and read it and then look at numerous responses I have given over the last 20 years OR, DM me and we can do coffee or lunch and I would be happy to tell you what I know about investment real estate, with strong emphasis on duplex investing. Cheers. Joe
24 Replies
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Marcos Cardenas I reviewed the numbers and listing so I have some thoughts.
#1 Good chance that's a $50k remodel. It's not the roughest property ever but if the HVAC, water heater, and roof is really old you're better off replacing them. Those items alone could be $25k. I'd dive deep and get the video tour to review the interior layout as well. All of this affects the ARV. With a 4% DP you have to get the maximum value add.
#2 It says it's tenant occupied. You didn't screen the tenants. That can be a problem if you choose to purchase it. Looks like another lease was signed in the fall... something to ask about.
#3 Location, location, location. Is that street very noisy?
#4 The listing description is full of nothing. About half of it describes the area, local shops, but nothing meaningful to the properties condition. This leads back to #1 because if you want $1400 per unit you'll need a good rehab to force the value.
Cheers
- Member since 2021 · 42 posts · 7 votes10mo
Hello Jaron, I hope all is well! Thank you for the great feedback. I will go back and reanalyze the deal with your considerations in mind. My rehad cost didnt take into consideration replacing HVAC and water heater and roof which are most likely old. Thank you for pointing out leaving out much of the property details and also the tenant. As far as rehab cost and ARV, Ive been trying to really pin point accurate numbers for that. What are your really good strategies to find rehad costs and ARV? Thank you Jaron!
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
Quote from @Marcos Cardenas:
Hello Jaron, I hope all is well! Thank you for the great feedback. I will go back and reanalyze the deal with your considerations in mind. My rehad cost didnt take into consideration replacing HVAC and water heater and roof which are most likely old. Thank you for pointing out leaving out much of the property details and also the tenant. As far as rehab cost and ARV, Ive been trying to really pin point accurate numbers for that. What are your really good strategies to find rehad costs and ARV? Thank you Jaron!
Rehab costs come with experience and getting into projects. ARV comes from sold comps (prior 3-6 months), market feel, and knowing the direction of the neighborhood. Hopefully you live nearby? It's looks pretty good if all those stores are local. High demand areas hold value. If you're looking at listings your job right now is to find/buy/create the best deal possible for you. Create the biggest spread from purchase to ARV as possible. Everything else has to be learned via swinging hammers, contractor support, and spending money.
- Member since 2021 · 42 posts · 7 votes10mo
Quote from @Jaron Walling:
Quote from @Marcos Cardenas:
Hello Jaron, I hope all is well! Thank you for the great feedback. I will go back and reanalyze the deal with your considerations in mind. My rehad cost didnt take into consideration replacing HVAC and water heater and roof which are most likely old. Thank you for pointing out leaving out much of the property details and also the tenant. As far as rehab cost and ARV, Ive been trying to really pin point accurate numbers for that. What are your really good strategies to find rehad costs and ARV? Thank you Jaron!
Rehab costs come with experience and getting into projects. ARV comes from sold comps (prior 3-6 months), market feel, and knowing the direction of the neighborhood. Hopefully you live nearby? It's looks pretty good if all those stores are local. High demand areas hold value. If you're looking at listings your job right now is to find/buy/create the best deal possible for you. Create the biggest spread from purchase to ARV as possible. Everything else has to be learned via swinging hammers, contractor support, and spending money.
Awesome thank you for the advice. Would you walk properties with a construction contractor before buying a property? That way the contractor can give an estimate on rehad cost?
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
Quote from @Marcos Cardenas:
Quote from @Jaron Walling:
Quote from @Marcos Cardenas:
Hello Jaron, I hope all is well! Thank you for the great feedback. I will go back and reanalyze the deal with your considerations in mind. My rehad cost didnt take into consideration replacing HVAC and water heater and roof which are most likely old. Thank you for pointing out leaving out much of the property details and also the tenant. As far as rehab cost and ARV, Ive been trying to really pin point accurate numbers for that. What are your really good strategies to find rehad costs and ARV? Thank you Jaron!
Rehab costs come with experience and getting into projects. ARV comes from sold comps (prior 3-6 months), market feel, and knowing the direction of the neighborhood. Hopefully you live nearby? It's looks pretty good if all those stores are local. High demand areas hold value. If you're looking at listings your job right now is to find/buy/create the best deal possible for you. Create the biggest spread from purchase to ARV as possible. Everything else has to be learned via swinging hammers, contractor support, and spending money.
Awesome thank you for the advice. Would you walk properties with a construction contractor before buying a property? That way the contractor can give an estimate on rehad cost?
When starting out yes but time is money. It's easier to get a walk through video, detailed photos, and then provide that to contractors. Most won't take you serious until you have the keys and have a scope of work together.
- Member since 2021 · 42 posts · 7 votes10mo
Quote from @Jaron Walling:
Quote from @Marcos Cardenas:
Quote from @Jaron Walling:
Quote from @Marcos Cardenas:
Hello Jaron, I hope all is well! Thank you for the great feedback. I will go back and reanalyze the deal with your considerations in mind. My rehad cost didnt take into consideration replacing HVAC and water heater and roof which are most likely old. Thank you for pointing out leaving out much of the property details and also the tenant. As far as rehab cost and ARV, Ive been trying to really pin point accurate numbers for that. What are your really good strategies to find rehad costs and ARV? Thank you Jaron!
Rehab costs come with experience and getting into projects. ARV comes from sold comps (prior 3-6 months), market feel, and knowing the direction of the neighborhood. Hopefully you live nearby? It's looks pretty good if all those stores are local. High demand areas hold value. If you're looking at listings your job right now is to find/buy/create the best deal possible for you. Create the biggest spread from purchase to ARV as possible. Everything else has to be learned via swinging hammers, contractor support, and spending money.
Awesome thank you for the advice. Would you walk properties with a construction contractor before buying a property? That way the contractor can give an estimate on rehad cost?
When starting out yes but time is money. It's easier to get a walk through video, detailed photos, and then provide that to contractors. Most won't take you serious until you have the keys and have a scope of work together.
Love the feedback, thank you Jaron!
- Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes10mo
@Marcos Cardenas Checked out the report. A couple of things to note.
1. The leases on this property do not expire until at least June 2026. Its possible to buy out one of the tenants though. Without the buyout then it will be unlikely to do an fha owner occupied deal on this property.
2. Its on a very busy street. It will be easy to lease it. You should check out the street behind the duplex though as that is the one that you will be using. I have seen streets behind duplexes like this that were very rough with pot holes.3. Without doing due diligence on the property its hard to determine the major expenses such as roof, hvac's etc. I have seen roofs that have been patched up for decades and the tenants never care as long as it doesn't leak. The same thing can be said about the hvac. The tenants won't likely care if its a brand new Trane model or an old Goodman as long as it works. Why spend money if its unnecessary? Spend money on the areas that the tenants will see such as flooring, paint, etc. ON this particular duplex it has ceramic tile flooring which is a good thing as that is incredibly durable. If anything paint the exterior. The exterior looks very dated. The pics are not good though. But only do it if the rent market analysis will justify spending money to get the extra rents. Higher rents will typically raise the value of the property.
Its priced nicely though! Its a surprise that its still on the market.
Hope that helps. Reach out if needed.
- Member since 2021 · 42 posts · 7 votes10moHello Aaron, I hope all is well. Thank you for your feedback, very helpful. Yes the idea was to purchase as a primary residence. I did not consider how the fha would approve with the tenant in place as well. Fha was the loan choice because of lower down payment. With your experience, do you think the price for this duplex is priced nicely because it indicates it need a lot of rehad to get it up to market? Thank you!
Quote from @Aaron Gordy:
@Marcos Cardenas Checked out the report. A couple of things to note.
1. The leases on this property do not expire until at least June 2026. Its possible to buy out one of the tenants though. Without the buyout then it will be unlikely to do an fha owner occupied deal on this property.
2. Its on a very busy street. It will be easy to lease it. You should check out the street behind the duplex though as that is the one that you will be using. I have seen streets behind duplexes like this that were very rough with pot holes.3. Without doing due diligence on the property its hard to determine the major expenses such as roof, hvac's etc. I have seen roofs that have been patched up for decades and the tenants never care as long as it doesn't leak. The same thing can be said about the hvac. The tenants won't likely care if its a brand new Trane model or an old Goodman as long as it works. Why spend money if its unnecessary? Spend money on the areas that the tenants will see such as flooring, paint, etc. ON this particular duplex it has ceramic tile flooring which is a good thing as that is incredibly durable. If anything paint the exterior. The exterior looks very dated. The pics are not good though. But only do it if the rent market analysis will justify spending money to get the extra rents. Higher rents will typically raise the value of the property.
Its priced nicely though! Its a surprise that its still on the market.
Hope that helps. Reach out if needed.
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Aaron Gordy "duplex it has ceramic tile flooring which is a good thing as that is incredibly durable." - FACTS
- Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes10mo
@Marcos Cardenas Several thoughts come to mind.
Sale price is 240k but the mortgage amount is 230k. To clarify, not putting 20% down causes one to pay PMI. I didn't see that in your expense category. Yes I also understand it is a house hack, but both sides are occupied. I thought the leases ran through June 2026. You may have to move in a bit earlier to comply with owner occupied loan provisions.
Overall, this is an EXCELLENT opportunity if you are going from renting to owning and house hacking. It is a GOOD opportunity if you were not house hacking. The 1% rule is what I use for the initial evaluation on the property. However, you have to include purchase price plus rehab cost and evaluate that against your rental income. Meaning that 240k plus 25k rehab (more like 30-35k) makes your purchase price 265k. To meet 1% you need $2,650 monthly rent, you are receiving $2800. I think this will work for you. I wouldn't call it a home run but a solid single to double.
Someone said be mindful of LOCATION, LOCATION, LOCATION. I don't give a sheet about location or school districts when renting a duplex. That is because my tenants could care less about location and/or school districts. Tenants that rent a duplex are looking for something clean, safe/comfortable and CHEAP! Cheap being the most important ingredient.
Don't misunderstand what I am saying, don't buy in a war zone but duplex communities are normally blue collar, lots of cars, and a rental neighborhood as compared to SHF housing, a mix of white/blue collar, fewer cars, and owner occupied properties who take pride in housing appearance and lawn care.
What YOU are interested in is NUMBERS that make the property profitable. Most of my duplexes are 2 bedrooms. Therefore I usually don't have families with children. If I do they are very young and don't attend school. I usually have a couple living together or a single tenant. So they are not concerned with schools and they usually are living paycheck to paycheck so affordability is highest priority. So if you can make your duplex the best on the block and keep rents very reasonable your occupancy will be good. I usually show my property one time before I get a signed contract. That is because of two things: I verbally screen prospects before I take the time to show my property and 2. My properties appearance is top notch when compared to the competition. Nice appliances, ceiling fans in living room and each bedroom, granite counter tops in kitchen and bathrooms, and tile or luxury vinyl flooring with new tall baseboards. Wall are painted with contrast not the same as the baseboards or ceiling. Microwave over stove. You want to show the property by opening the door and let them walk in first. If you hear them say "WOW" with in the first 5 steps in the property you know you have them as a tenant should YOU want them.
If you want more tips, do one of two things. Go to my profile and read it and then look at numerous responses I have given over the last 20 years OR, DM me and we can do coffee or lunch and I would be happy to tell you what I know about investment real estate, with strong emphasis on duplex investing. Cheers. Joe
- Member since 2021 · 42 posts · 7 votes10mo
Quote from @Joe Scaparra:
@Marcos Cardenas Several thoughts come to mind.
Sale price is 240k but the mortgage amount is 230k. To clarify, not putting 20% down causes one to pay PMI. I didn't see that in your expense category. Yes I also understand it is a house hack, but both sides are occupied. I thought the leases ran through June 2026. You may have to move in a bit earlier to comply with owner occupied loan provisions.
Overall, this is an EXCELLENT opportunity if you are going from renting to owning and house hacking. It is a GOOD opportunity if you were not house hacking. The 1% rule is what I use for the initial evaluation on the property. However, you have to include purchase price plus rehab cost and evaluate that against your rental income. Meaning that 240k plus 25k rehab (more like 30-35k) makes your purchase price 265k. To meet 1% you need $2,650 monthly rent, you are receiving $2800. I think this will work for you. I wouldn't call it a home run but a solid single to double.
Someone said be mindful of LOCATION, LOCATION, LOCATION. I don't give a sheet about location or school districts when renting a duplex. That is because my tenants could care less about location and/or school districts. Tenants that rent a duplex are looking for something clean, safe/comfortable and CHEAP! Cheap being the most important ingredient.
Don't misunderstand what I am saying, don't buy in a war zone but duplex communities are normally blue collar, lots of cars, and a rental neighborhood as compared to SHF housing, a mix of white/blue collar, fewer cars, and owner occupied properties who take pride in housing appearance and lawn care.
What YOU are interested in is NUMBERS that make the property profitable. Most of my duplexes are 2 bedrooms. Therefore I usually don't have families with children. If I do they are very young and don't attend school. I usually have a couple living together or a single tenant. So they are not concerned with schools and they usually are living paycheck to paycheck so affordability is highest priority. So if you can make your duplex the best on the block and keep rents very reasonable your occupancy will be good. I usually show my property one time before I get a signed contract. That is because of two things: I verbally screen prospects before I take the time to show my property and 2. My properties appearance is top notch when compared to the competition. Nice appliances, ceiling fans in living room and each bedroom, granite counter tops in kitchen and bathrooms, and tile or luxury vinyl flooring with new tall baseboards. Wall are painted with contrast not the same as the baseboards or ceiling. Microwave over stove. You want to show the property by opening the door and let them walk in first. If you hear them say "WOW" with in the first 5 steps in the property you know you have them as a tenant should YOU want them.
If you want more tips, do one of two things. Go to my profile and read it and then look at numerous responses I have given over the last 20 years OR, DM me and we can do coffee or lunch and I would be happy to tell you what I know about investment real estate, with strong emphasis on duplex investing. Cheers. Joe
Hello Joe, I hope all is well! Wow, thank you for the great feedback! I will reevaluate for PMI, taxes, and insurance. Do you recommend a good strategy to properly calculate for PMI and taxes? Also, yes the idea was to make number work to make a deal while in a B or C neighborhood in a working class neighborhood. I love the advice on properly screening and personally showing your properties to tenants! Thank you Joe.
Why did you use 3% vacancy? Austin’s vacancy rate is over double this.
Your maintenance/cap ex is at least 2x low?
How certain are you that this is a legal duplex? Check the permits/history.
Need to include PMI. Need to include the misc such as bookkeeping, asset protection, accountant/tax man, utilities from property failure such as slab leak or other water leak, etc.
good luck- Member since 2021 · 42 posts · 7 votes10mo
Quote from @Dan H.:
Why did you use 3% vacancy? Austin’s vacancy rate is over double this.
Your maintenance/cap ex is at least 2x low?
How certain are you that this is a legal duplex? Check the permits/history.
Need to include PMI. Need to include the misc such as bookkeeping, asset protection, accountant/tax man, utilities from property failure such as slab leak or other water leak, etc.
good luckHello Dan, I hope all is well! Thank you for the great feedback! I used 3% vacancy to account for any time the unit does not have a tenant. But it sounds like I should evaluate the rental market in Austin again for vacancy rates . Do you have a good strategy to evaluate rental markets? Also thanks for pointing out the other expenses such as the accountant and bookkeeping, etc. Does a property manager usually take care of those things? Thank you Dan!
- For vacancy rates, I would Google it for your jurisdiction with recognition that small operators usually cannot turn a unit as quickly as bigger operators but may end up with less vacancies so it may be a wash overall but in my underwriting, if I had no handyman crew, I would use a bit higher rate than the jurisdiction’s vacancy rate.
Quote from @Marcos Cardenas:
Quote from @Dan H.:
Why did you use 3% vacancy? Austin’s vacancy rate is over double this.
Your maintenance/cap ex is at least 2x low?
How certain are you that this is a legal duplex? Check the permits/history.
Need to include PMI. Need to include the misc such as bookkeeping, asset protection, accountant/tax man, utilities from property failure such as slab leak or other water leak, etc.
good luckHello Dan, I hope all is well! Thank you for the great feedback! I used 3% vacancy to account for any time the unit does not have a tenant. But it sounds like I should evaluate the rental market in Austin again for vacancy rates . Do you have a good strategy to evaluate rental markets? Also thanks for pointing out the other expenses such as the accountant and bookkeeping, etc. Does a property manager usually take care of those things? Thank you Dan!
property manager reduces the need for a book keeper and can make tax person’s job easier but likely does not eliminate the need. For example, my property manager knows income and many of the expenses, but does not know my piti. For our number of units we take the property manager’s data, which is organized in a spreadsheet, and move it to QuickBooks. With one rental unit, QuickBooks is likely overkill and you likely will be the bookkeeper adding your expenses into a copy of the spreadsheet provided by the pm. however, if you are doing bookkeeping then you deserve compensation for that effort. you may take the same route with taxes and use something like turbo tax (purchase being a misc expense). If using a pm, maybe allocate a small percentage for asset management that includes you bookkeeping, possibly as tax persons, and your role as asset manager. For example as asset manager (my units using PM are STRs), I look at monthly statements, new reviews on the various OTAs, forward looking reservation calendar, new/cancelled bookings, read all correspondence from the PM, attend any PM virtual town halls, approve repair requests from the pm, incorporate data into QuickBooks (we have someone that sometimes does this for us), and attend (sometimes virtually) council meetings were STRs are on the agenda . It sounds like a lot, but it does not take much time. Typically less than 2 hours/month per unit. 4 str units typically is less than 8 hours per month. Note one council meeting can throw this off as they can easily take 5-6 hours including drive but they are fairly rare.
this past year we had a $2k water utility charge (water is very expensive in my jurisdiction) we paid for because it was a property issue and tenant was not responsible. This could be a big hit on a single unit, but should be very rare on any one unit. If you have allocated for this type of stuff happening, then it is already allocated for. Let’s say I allocate $25/month per unit for this type of utility charge. 25 units at $25/ month is $625/year. If I get one of these types of unexpected utility charges every few years (which likely is fairly close to accurate but usually they are not as expensive as $2k) I have it covered.
how Often have you seen an eviction expense in underwriting. Some markets have a significant high risk of having an eviction. This and other legal costs are in my misc expenses.
can say same about bookkeeping, asset protection (LLC and/or umbrella), tax prep, unexpected utilities, etc. I put an offer on a property that had mandated annual fire inspections. The fire inspections would mandate clearing unless you did it in prep of the inspection. I carried this outside my misc cost, but it is an example of an expense that may not get reflected in the underwriting. I allocated $3k/year for inspection and addressing the various issues (this was in addition to my maintenance/cap ex that also included some yard care).
my point is there are a lot of little misc costs. Someone projecting $100/month cash flow, even if the have accurate underwriting on the major expenses, may be cash negative when including all the misc expenses.
good luck
- 10moAlexandra Hughes PailetPro Member🎉 Director of Events at BiggerPockets · Denver, CO · Member since 2016 · 430 posts · 438 votes
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- 10moCarlos RodriguezPro MemberInvestor · Austin, TX · Member since 2015 · 15 posts · 8 votes
@Marcos Cardenas Coincidentally, I did exactly what you are looking to do in one of the duplexes down the street. I bought the duplex for around the same price and lived in it while I made some cosmetic improvements. This was about 12 years ago, so it was a very different market. However, I agree with most of the above. Be super conservative with your estimates in your analysis. If you're free tomorrow evening, there's an Austin RE Meetup at Draught House at 7pm. Happy to tell you about my experience with the neighborhood over a beer.
- Member since 2021 · 42 posts · 7 votes10mo
Quote from @Carlos Rodriguez:
@Marcos Cardenas Coincidentally, I did exactly what you are looking to do in one of the duplexes down the street. I bought the duplex for around the same price and lived in it while I made some cosmetic improvements. This was about 12 years ago, so it was a very different market. However, I agree with most of the above. Be super conservative with your estimates in your analysis. If you're free tomorrow evening, there's an Austin RE Meetup at Draught House at 7pm. Happy to tell you about my experience with the neighborhood over a beer.
Hello Carlos, thank you for the feedback! I hope to connect on the next RE meet up and talk!
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Marcos Cardenas and @Carlos Rodriguez did you guys just become best friends?!
Love this.
- Member since 2025 · 7 posts · 4 votes10mo
@Marcos Cardenas-What's your strategy? Is this a flip, or a longer term portfolio addition?
- Member since 2021 · 42 posts · 7 votes9mo
Quote from @Andrew May:
@Marcos Cardenas-What's your strategy? Is this a flip, or a longer term portfolio addition?
Hello Andrew, the plan is to long term hold the property and let it cashflow after both units are occupied with tenants.
- Real Estate Consultant · Fort Myers, FL · Member since 2025 · 6 posts · 1 vote9mo
Hey Marcos,
At a high level, I’d double-check a few assumptions before getting comfortable with the $300/month cash flow, especially on a 203k structure. Rehab scope, true operating expenses, and vacancy/maintenance sometimes get underestimated on small multifamily.
I’d also stress test what happens if rents come in slightly below pro forma or if expenses run higher than expected. It may tell you how thin the margin really is.
Happy to take a deeper look if you want a full second opinion.
- Member since 2026 · 15 posts · 8 votes9mo
One thing I’d add to what’s already been said is to sanity-check the order of assumptions.
A few pressure points I’d re-run before calling this $300/mo positive:
• Rent confidence – $1,400/unit needs to be supported by recent duplex comps on similar streets, not just average Zillow numbers. Busy road exposure matters more for duplex tenants than SFRs.
• True rehab scope – If HVAC, roof, or water heaters are near end of life, that's not optional CapEx. Underwriting those as "maybe later" artificially inflates cash flow.
• Owner-occupant friction – Tenant buyouts, lease timing, and FHA/203k constraints can materially change your timeline and cash requirements.
• Exit reality – ARV looks plausible, but only if the finished product matches top-of-market finishes and the location supports it.
At breakeven to modest cash flow, this deal lives or dies on downside protection and execution, not headline returns. If the numbers still work after tightening assumptions, it’s interesting. If not, it’s a pass, and that’s a win too.
- Remote | Operations & Deal Support · Member since 2026 · 17 posts · 6 votes9mo
Thanks for sharing the numbers.
For the $300 monthly cash flow, is that calculated after vacancy and maintenance reserves, or assuming full occupancy? With a duplex and a 203k rehab, I’d want to sanity-check how sensitive that cash flow is if one unit turns over.
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